Does the Gig Economy Hurt Staffing Agencies?

Kevin Ko Market Trends, Products & Technology, Staffing

The gig economy is sweeping the U.S. – but is it here to stay? While many businesses see the advantage of utilizing modern technology to measure the current need for talent and hire free agents to for specific tasks, they’ve also begun to see the potential downsides. The same is true for employees.

CIO shared research from the Fieldglass software company that found over a third of the 2016 workforce is made up of non-traditional employees. The gig economy – led by companies like Uber, Airbnb and TaskRabbit – encourages individuals to work as free agents and report activities through mobile devices. While this provides a great deal of freedom, it also means candidates may need staffing agencies to provide dependability when employers are not.

Staffing agencies can help candidates through any shift in the current job market, provided the organization has the insight and tools necessary. Here are a few common complaints about the gig economy and how staffing agencies can help:

Necessary technology
In order to communicate with gig employers, most workers need mobile devices. Uber drivers and TaskRabbit laborers need to use smartphones and tablets to see who needs service and report their availability to the company. One of the concerns with a large shift to a gig economy is the reliance on technology, according to the Washington Post.

Staffing agencies need mobile recruitment and applicant tracking systems to keep up with the speed of the gig economy. As people are outperforming jobs and earning experience, staffing agents must track actions and respond to questions on their own mobile devices.People just starting out may consider a mobile device with an excellent data plan a major investment. They need employment immediately to justify their purchase. Also, wireless coverage needs to be ubiquitous – and certain areas in the U.S. still suffer from dead zones. At the same time, people could become reliant on mobile communications and expect rapid data exchanges from every aspect of their professional life.

Lack of benefits
Employers can save money on contingent workers because they don’t have to pay for the same benefits as full-time employees. Forbes said many free agents don’t mind this arrangement as they are fine trading in retirement and healthcare packages for higher wages. Unfortunately, this means many people are only thinking short term and staffing agencies must help them take a full view of their needs.

While government regulations like the Affordable Care Act provide options for contingent workers to secure stability on their own, some believe the government should do more in light of the massive popularity of the gig economy. As more individuals begin contingent contracts, employers may face more rules on how to fairly compensate non-traditional employees.

Staffing agencies should keep a close eye on changes and communicate new opportunities to candidates. When searching for leads online, it’s wise to market an organization’s ability to respond to market shifts.

Limited stability
The gig economy often promotes worker participation through high hourly wages. Newsweek suggested a problem with this process is agents receive substantial but infrequent paychecks. It may be difficult for employees to count on their salary when working gig to gig.

“Staffing agencies need to prepare for quick turnover.”

It’s for this reason that many people in the gig economy work more than one job or only hold a position with a contingent employer for a short period of time. Staffing agencies need to prepare for quick turnover. After placing a candidate with a gig company, it’s important to continue the relationship and keep them aware of other opportunities or provide a source of dependable information.

Consumers don’t trust free agents
Using a ride-sharing program means getting into a stranger’s car. Wired said many consumers are uncomfortable with gig employees due to a lack of training or certification. Systems like passenger ratings are in place to help customers maintain control, but sometimes it isn’t enough.

Once again, the government may step in and make regulations for employment screening. A staffing agency can help by assisting an employer as they sort through data that displays a candidate’s criminal history and personal skills. A talent profile should include qualities that showcase an individual’s ability to manage their own schedule, work with customers and maintain strict decorum.

Could it be temporary?
It’s true that many gig economy companies were met with substantial initial success. Companies like Uber grew quickly thanks to immense consumer demand. On the other hand, ride-sharing brands face challenges in certain cities. Some areas place strict regulations on the business model. Meanwhile, many local governments continue to argue about how to best work with these organizations.

Fast Company said many companies avoid the troubles of local regulations, consumer complaints about freelance agents and contingent worker lawsuits by returning to traditional employment models. The gig economy is still going through growing pains and it’s possible the practice may not survive early obstacles – or at least it won’t be the game changer that lasts forever. Agencies must use flexible and simple staffing software solutions ready to change with the times.